marketing
Market Penetration
The percentage of your target market that buys from you - versus alternatives.
Definition
Market penetration is the share of your target market that buys your product or service - your customer base divided by the addressable market size. Low penetration (under 5%) means most of the market is open; high penetration (above 30%) means growth gets harder and you're competing on share rather than category creation. The strategic question: are you in 'land grab' mode (low penetration, race to acquire) or 'defend and expand' mode (high penetration, focus on retention and expansion)?
In your business
- →Estimate penetration to know whether you're in land-grab mode or defend-and-expand mode
- →Low penetration: prioritize acquisition. High penetration: prioritize retention and expansion
- →Penetration is a strategic compass - decide which game you're playing